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CA Final · Financial Reporting · Ind AS 36 Impairment of Assets

Kaveri Realty Ltd holds an investment property and wonders about the treatment of such property within Ind AS 36. In the comparison with IAS 36, why is paragraph 2(f) deleted in Ind AS 36 and paragraph 5 modified?

Paragraph 2(f) is deleted and paragraph 5 modified because Ind AS 40 requires the cost model for investment property. The IAS 36 reference to investment property measured at fair value therefore has no application in Ind AS 36.

  1. ABecause Ind AS 40 permits both fair value and cost models, so impairment is optional
  2. BBecause investment property is exempted from impairment testing in India
  3. CBecause Ind AS 40 requires the cost model, so the reference to fair value measured investment property is not neededCorrect
  4. DBecause investment property is covered by Ind AS 105 only

Explanation

Ind AS 40 requires the cost model, so the IAS 36 exclusion of investment property at fair value is removed. Paragraph 5 is modified by deleting the fair value reference. Hence cost-model investment property falls within Ind AS 36, so option 2 is wrong.

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